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The Effects of Export Diversification on Macroeconomic Stabilization : Evidence from Korea

Author

Listed:
  • Jinsoo Lee

    (KDI School of Public Policy and Management)

  • Bok-Keun Yu

    (Economic Research Institute, The Bank of Korea)

Abstract

This paper studies whether export diversification mitigated the negative effect of the global financial crisis on exports using the Korean case. Specifically, we use annual data on the exports of 24 Korean manufacturing industries from 2000 to 2016 and examine whether the negative effect of the crisis on exports was less prevalent in industries that were more diversified in terms of country and product. We also examine whether export competitiveness, measured by the revealed comparative advantage index by industry, had a mitigating effect on trade during the crisis. In order to study these issues, we use a panel regression with a fixed-effect model for 24 Korean manufacturing industries. From our empirical analysis, we find that country diversification weakened the negative impact of the global financial crisis on Korea¡¯s exports, but neither product diversification nor export competitiveness did so.

Suggested Citation

  • Jinsoo Lee & Bok-Keun Yu, 2018. "The Effects of Export Diversification on Macroeconomic Stabilization : Evidence from Korea," Working Papers 2018-25, Economic Research Institute, Bank of Korea.
    • Handle: RePEc:bok:wpaper:1825
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    References listed on IDEAS

    as
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    8. repec:wbk:wbpubs:28040 is not listed on IDEAS
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    10. Jinsoo Lee & Bok-Keun Yu, 2018. "What Drives the Stock Market Comovements between Korea and China, Japan and the US?," Working Papers 2018-2, Economic Research Institute, Bank of Korea.
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    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • F10 - International Economics - - Trade - - - General
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General

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